Date : 2021-03-30
Mango Markets offers up to 5x, cross-margined leverage for both makers and takers on Serum with a seamless, centralized exchange feel.
Current on-chain lending protocols (e.g. Aave, Compound) provide up to 2x leverage for margin traders, but this comes with severe downsides.
For one, Ethereum gas prices are prohibitive for the majority of traders.
Secondly, the margin trading can only be done with market orders or swaps — not limit orders.
This makes them completely useless for market makers.
Centralized trading platforms can provide leverage similar to Mango Markets, but they have opaque rules and ultimately take custody of traders’ funds.
This creates extra security risks and the trader is ultimately at the discretion of the exchange on the availability of his funds.
The goal of Mango Markets is to create a trader and maker-friendly decentralized trading platform.
Initial core features will be fully on-chain margin trading on limit order books as well as perpetual futures, which are the main drivers of centralized exchange revenue.
Moving those to Defi is an essential step for money legos to overcome the CeFi platforms.
Building on Ethereum would hinder the team from implementing the best possible user experience, the team went with Solana instead.
Mango Markets is following other influential players in the field with their choice of the platform here and is excited to pioneer the Solana ecosystem together with everyone that is already building on it.
The collateral ratio is the value of the user’s deposits and positions divided by the value of their loans.
For the initial set of markets, Mango will require an initial collateral ratio of 120%, and a maintenance collateral ratio of 110%.
If the user’s collateral ratio drops below 110%, the account will be liquidated and the user will lose the entire account.
The value of the account will be calculated using a moving average of centralized exchange price feeds, provided by a decentralized oracle.
Accounts must maintain a minimum 110% collateral ratio.
If an account falls below the 110% threshold, a liquidator absorbs your position and becomes the new account owner.
Anyone can run a liquidator with the opportunity to make a profit;
Mango will open-source liquidator bot soon, but they encourage others to build their versions.
Lenders, Borrowers and Liquidators
The lending pools work similarly to the lending pools on Aave.
With the big difference that users will earn interest on both their deposits as well as their positions (so you may be earning net interest on your margin position!).
The interest rate is a function of the utilization ratio: total borrowed by all users divided by total deposits of all users.
The interest rate will increase slowly approaching a utilization ratio of 70% but will increase rapidly above that to encourage the market to deposit more funds.
Up to 5x leverage · Lightning Speed · Near-zero fees.
– Trade with up to 5x leverage, long or short, with limit orders on Serum DEX’s fully on-chain order book as a maker or taker while earning interest on deposits and margin positions.
– Earn maximal interest on deposits, protect against inflation, and utilize idle investments. Always maintain custody of your funds.
– No fees on interest. The only fees you will pay are for trading on Serum DEX. Contribute your SRM into our pool to reduce the fees for everyone. Let’s reach the top Serum fee tier together.
1.Mango Markets is Top 1 Solana X Serum Defi Hackathon
1/ TGE: N/A
2/ Listing: N/A
– Closed Alpha
– First weeks of March 2021
– Strict borrow limits
– Closed source liquidator and contracts
– Begins mid-march 2021 and runs for multiple months
– Removal of borrow limits
– Step-wise open sourcing of the project as independent reviews are finishing
– Improvements to margin trading user-interface
– Launch additional trading pairs